The correction on daily basis worked out in the last issue did not come. On the contrary: Last week again the stock markets turned out to be exceptionally strong marching on straightly upwards. Now December 15 is suggesting itself as the next turning point for a coming correction in the upwards trend:

 

 

 

Being the clock of the rally the NASDAQ-100 is going on orienting itself by the upper limit of its Gann Angle corridor. The break attempt of last Tuesday was not successful, intraday things were put straight again, the market being forced into the corridor again. As mentioned, the half-hearted outbreak attempt was not followed by a correction. On the contrary: The target of 2234 is very likely to be reached directly by December 15/16. That’s where we’ll cover our long position on daily basis. Because we will always have to reckon on an extensive correction in case of reaching the main target, the 5th double arc. The obvious target of the expected correction is the primary Gann Angle at about 2190.

 

That possible correction in the upwards trend doesn’t distract the overall picture of the index at all. It becomes intelligible in the weekly 5 Candle GUNNER24 Up Setup:

 

 

The situation: Next week the market will be in its 25th week of the upwards trend following the gray backed Gann Angle corridor. Last, the lower limit of the corridor was tested for three weeks successfully. Thus, those tests have produced enough energy to chase the market up to its main target, the 3rd double arc, to the 2257. Another test of the lower Gann Angle at 2192 could be used for a short term long entry next week. The important time line, the right limit of the just passed square is still as far as two week candles. That’s where we’re expecting a more extensive correction in the upwards trend. We will cover our weekly long positions at 2257.

 

Daily 8 Candle GUNNER24 Up Setup of the S&P 500:

 

 

On Tuesday our long position was covered at 1233, because at the 4th double arc we were expecting a correction. Nothing happened. The wider market index turned out to be extremely strong, as well. The 4th double arc was taken in the first attempt as if that resistance didn’t exist at all. With help of the analysis of the monthly setup we absolutely gave that development its elbow room:

 

Correspondingly, as well as in the NASDAQ-100, now we’re expecting the beginning of a little correction to happen on Monday/Tuesday starting at 1245 (red dotted resistance diagonal) and ending at 1223. We’ll look for the new long entry at the 1223, in the environment of the green dotted support horizontal anchored in the daily 8 Candle GUNNER24 Up above and of the primary Gann Angle which should produce strong support as well.

 

 

The weekly picture is showing likewise how powerfully the market is pushing upwards. The week closed at the week high. A firm Fridays is always a good sign. The Gann Angle that had been limiting the price rise for months was overcome for the second time. Merely theoretically it should not be broken significantly. Since the lost motion of the Gann Angle amounts to 25-30 points as early as next week the next GUNNER24 target at 1267 could be reached.

 

Anyway, the 1267 are just an interim stop on the way to the 1300! Please let me explain why we’ll expect a correction again after reaching the 1267. About that, pay attention to the big X in the setup above. We’ll apply a counter setup there:

 

 

Consider both setups very calmly…The market is following a pattern. In the whole world nothing but the GUNNER24 Forecasting Method is able to recognize it!

 

 

For better understanding here’s the counter setup all alone. Can you see the market orienting itself from the "invisible green double arc"? That has been happening since April 2009! That’s where it offered support with the first correction in the upwards trend. Since the market could not break the red double arc in the further course it followed upwards until April 2010. There, at the price and time magnet (the intersection lower line of the red double arc and the Gann Angle) the correction of April was released. Then, with the July lows the market caught itself again at the green double arc which has been supporting the market ever since pulling it upwards.

 

That is supposed to continue until the week from February 14 to 18, 2011. Afterwards the market will enter into the interstice between both double arc lines. That "temporal area of influence" will last from February 21 to April 02. Within that area the direction of the price move is always hard to assess. But since the market shall have risen before we’ll have to reckon on a sharper correction or a change in trend, respectively.

 

It’s conspicuous that the market never goes away far from the upper limit of the green double arc. You might say the double arc keeps the market preventing a stronger out break upwards. A very well-mannered, slow and steady upwards trend, nerve-racking for all the bears. A classical upwards trend: Two steps ahead, one back…That’s why this time again we suppose that the market is not going to go away from the upper line of the green double arc. Well - until a maximum of 1267.

 

Within the week, another Gann Angle seems to have been broken on its way to the 1300. The target of 1300 seems to be logical. Not before that amount the market is confronted with strong resistances: The Gann Angle and the horizontal limit of the just passed square. Watch the red arrows.

 

A cross-check on the actual weekly 5 Candle GUNNER24 Up confirms the main target of 1300:

 

 

Here again we recognize the upwards force of the market. The 5 candle initial impulse started in July 2010 is putting out the 1300 as the main target, too. The 2nd double arc has not been broken yet. In case of a weekly close of more than 1245 we will enter into another long position! SL would be the primary Gann Angle. In case of a lower closing price it would take effect.


 

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As we can see in the daily 2 Candle GUNNER24 gold did reach its price target but it did not do it at the right moment. Instead of Tuesday the high should have come on Wednesday. The 4th double arc was not touched! There’s a mismatch between time and price = point of danger number 1.

 

Together with the just passed correction which proceeded quickly and crunchy some important Gann Angles were split in two = point of danger number 2. That’s why on Thursday we had to close our long positions at 1401. Now gold is below the 1*1 Gann Angle in the bearish half of the setup = point of danger number 3. The 3rd double arc was broken from above, with the last two days gold closed within that double arc being unequivocally subject to its downwards pressure = point of danger number 4.

 

On Friday the primary Gann Angle was tested for the eighth time! Friday produced a higher low as far as the Wednesday low is concerned. Those might have been good omens for the resume of the uptrend above all considering that it happened on a Friday when the market participants could have set an UNAMBIGUOUS sell sign. If we apply a 2 candle initial impulse GUNNER24 Down above at the 1432.5 the first double arc will be at 1342. That would be the first down target if the primary Gann Angle breaks! The decision whether it’s going on upwards or downwards will be settled very fast in the course of Monday:

 

 

The actual 8 hour setup makes it clear too that gold is on the razor’s edge. Considering the comportment of the last five candles in the light of their highs the downwards pressure of the 3rd double arc becomes very obvious. As early as at market opening a new downwards pressure might arise, and the following 14 hours could have the 1*2 been broken. Then it should go down to the 1342 super rapidly.

 

But with the last nine candles a loose flag seems to surge as well. That would mean a rise up to about 1391 (upper line of the 3rd double arc). That’s where the decision will be made whether we turn upwards again or the 1*2 wants to be tested again. My advice: Use the hours until the opening of the NYMEX to even up your existing longs. There will still be plenty of time for going long in case the dangerous downwards pressure within the daily time frame will have reduced and in case the strong trends of the weekly and the monthly time frames will seize control again. If the Monday or the Tuesday close is at more than 1405 gold will be out of the woods and the 1446 will become obvious again. Otherwise at the 1340 we would be going to look for a re-entry on daily basis into some longer term longs. 

 

Be prepared!

 

Eduard Altmann